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If someone asked you what your greatest asset is what would you say? Unless you are retired or just a few years away, the answer is most likely your ability to earn income.
Last week I had a call from a client that is all too common, it went something like this:
Client: Hey Adam, just calling to let you know that my business partner Colin will be off work for 6+ months due to a serious back injury. What do we have in place to replace his income?
Me: Well unfortunately you and Colin chose not to protect your income when we discussed it last year. So unfortunately, you have no income replacement coverage for Colin.
Client: Well fortunately Colin is not married and does not have any kids, so I guess he is lucky.
Me: I guess he is, but his parents or whoever else will be looking after him is not so lucky!
Me: Just a reminder that you don't have coverage either, so maybe this is a wake-up call to get something in place. You aren't in the same position as Colin – you have 4 kids and a wife to look after that all rely heavily on your income.
I get a call like this at least a few times a year. I always compare it to trying to buy fire insurance on your house as it is burning down.
Look I get it, your budget is already filled with: car insurance, house insurance, travel insurance, life insurance, phone insurance etc….Adding another insurance is just not in the budget.
Based on my experience you will find the budget to cover your income as soon as someone close to you experiences a situation where they can't work and have no insurance, or sometimes when you know someone that had insurance that saved them during a disability.
This is where someone has purchased an individual Disability Policy through myself or another independent insurance advisor. The policy is owned and paid for personally and follows them even when they switch jobs. It has the best built in features and the contract is fully underwritten at application. We can customize the policy to fit your need and budget.
A large majority of you fall into this category. This is where your company provides some form of disability as part of your benefits package. This type of coverage can vary drastically from only paying for 2 years to only paying a small percentage of your income. Government workers have it a bit better, but there are still gaps. My recommendation for this group is to have a professional explain your coverage to you in plain English so you know what you are covered for. You can always complement or top up a bad work plan with an individual plan. Don't assume your work plan will replace your income, it rarely does.
Unfortunately, this is also a common 'plan' that many of you reading this have. I have been in this business long enough to have heard all the excuses by now: 'it won't happen to me', 'I can't afford it', 'I can still work part time and have someone else run my business', 'I don't do anything dangerous' etc….I can tell you that it could happen to you, you can afford it and that if you think you can and will work if you are in a coma, serious brain injury or many other disabilities, you are kidding yourself.
My story from this year:
I have an individual plan (happy to share exactly what I have with you one on one) but I am still human and have the same thoughts you all have listed under the 'no plan'. I get it, who wants to spend money on another insurance policy.
This past winter I came down with a rare virus that caused my ear to plug up. This then spread to both ears for quite some time.
Why do I mention this? Because during my loss of hearing I had a very difficult time working, or at least working to the capacity I need to. I had no hearing on and off for 9 weeks. I was fortunate that the hearing came back, but my specialist told me that many adults lose their hearing cold turkey for no reason! Seriously, can you imagine.
The reality is that none of us expect to be disabled (in any capacity), but it can come at us in so many ways.
I hope the next conversation I have with you around your income protection is while you are healthy and working. I can't do anything once the event has occurred.
Call me today to book a meeting to move from a no plan to individual plan or to review your work plan.